Chordin-mediated regulation of bone morphogenetic protein (BMP) family growth factors is essential in early embryogenesis and adult homoeostasis. Chordin binds to BMPs through cysteine-rich von Willebrand factor type C (vWC) homology domains and blocks them from interacting with their cell surface receptors. These domains also self-associate and enable chordin to target related proteins to fine-tune BMP regulation. The chordin-BMP inhibitory complex is strengthened by the secreted glycoprotein twisted gastrulation (Tsg); however, inhibition is relieved by cleavage of chordin at two specific sites by tolloid family metalloproteases. As Tsg enhances this cleavage process, it serves a dual role as both promoter and inhibitor of BMP signalling. Recent developments in chordin research suggest that rather than simply being by-products, the cleavage fragments of chordin continue to play a role in BMP regulation. In particular, chordin cleavage at the C-terminus potentiates its anti-BMP activity in a type-specific manner.